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Changes to Stripe provider onboarding and Stripe Capabilities framework

Capabilities framework offers tools to manage regulatory aspects of provider onboarding. This article outlines mandatory changes to the framework and instructions regarding your actions on reacting to those changes.

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Coping with regulatory environment regarding provider onboarding can be a complex and daunting task. Fulfilling these requirements means that you need to be collecting a variety of information from your providers in order to be able to process payments. Stripe has a mechanism for controlling the amount of information collected from providers called Capabilities.

Capabilities are a collection of settings that can be requested for each provider. What Capabilities are required determines what information Stripe requires to be collected from the providers.

Currently, marketplaces located in the United States have used card_payments Capability for their providers. Rest of the world has legacy_payments enabled.

Changes to Capabilities framework

Stripe is introducing mandatory changes to the Capabilities framework. In the beginning of 2020, Stripe will enforce Capabilities for all accounts, existing and new. Stripe’s deadlines for reacting to these changes are:

  • February 20th 2020 for customers in the US.
  • March 31st 2020 for the rest of the world.

In practice, there might be small variations for these depending on the country and activity of the marketplace.

After requesting new Capabilities, your providers need to most likely provide additional verification information to Stripe and you need to update your provider onboarding and payment information updating processes in your marketplace application.

How should you handle the changes to Capabilities framework?

For Flex payments to operate smoothly, your accounts need to have the card_payments and transfers Capabilities required and activated. card_payments will enable the providers to accept payments by card and transfers will allow the platform account to move money to connected accounts. Requesting card_payments will enforce also requesting transfers Capability. Requesting Capabilities can be done during Stripe Account create and update calls.

Activating the Capabilities happens by providing identity verification information to Stripe. The recommended way to achieve this is by using Stripe Connect Onboarding. The Stripe Connect Onboarding will automatically ensure that all required information is collected from providers.

However, if you wish to control the onboarding flow fully, you can utilize account tokens during the create and update calls. What information is required for Capability activation is dependent on the provider's account and activity. The specific information can be determined programmatically from stripeAccountData in Stripe Account resource. The stripeAccountData attribute contains the related Stripe Account Object, as returned by Stripe's API, where the fields payouts_enabled and requirements can provide you with valuable information.

Depending on when you have subscribed to Flex, you may need to take action and implement changes to your marketplace's provider onboarding flow.

Instructions for Flex subscriptions started before December 20th 2019

If you have subscribed to Flex before December 20th 2019 you need to react to the changes.

Migration on January 8th 2020

We will perform a migration on January 8th 2020 requiring card_payments, transfers and legacy_payments Capabilities for all of your provider accounts and update your marketplace's Stripe API version to 2019-12-03. card_payments and transfers Capabilities are required for payments to work after the above deadline. legacy_payments is a Capability allowing your current implementation to work until the deadline.

Your actions

In order for you to make sure that your marketplace is ready for the above deadline, you need to perform the following actions:

  • If you wish to use Stripe Connect Onboarding, enable it in your Stripe Dashboard
  • Make sure that your marketplace application is ready for the changes by following our how to guide for provider onboarding
  • Inform your providers that they need to provide additional information to Stripe. See below for instructions on how to do this.

Informing providers

After the migration, the information about soon to be restricted provider accounts can be found from Stripe. By navigating to your Stripe Dashboard Connect Accounts, you can list your providers that are restricted currently and that will be restricted soon. By using the same view, you can also export contact infromation about the providers and utilize that to send appropriate information to them.

Not reacting to the changes

If you don't react to the changes, your marketplace will continue functioning as is until the deadline. After that, the payments will start failing for providers in your marketplace whose card_payments and transfers Capabilities haven't been activated by providing enough identity verification information to Stripe.

You can already start implementing and testing the provider onboarding and updating processes in your marketplace application. Before deploying these changes to production, we recommend that you wait for the migration on January 8th. The migration will make implementing things simpler regarding your existing provider accounts.

Instructions for Flex subscriptions started after December 20th 2019

Your marketplace by default supports and is ready for the changes to the Capabilities framework. In practice:

  • The card_payments and transfers are required for your users
  • The newest Flex Template for Web is using Stripe Connect Onboarding

You can continue using Flex API and developing your marketplace as is, and you don't need to react specifically to the changes.